Connect with us


Phuket Business: AMCHAM’s warnings

Legacy Phuket Gazette



PHUKET: “Caution” was a common theme echoed at the American Chamber of Commerce (AMCHAM) Greater Phuket Chapter’s final meeting of the year, held recently at the Royal Phuket Marina.

The evening featured three informative presentations, courtesy of AMCHAM Thailand’s legal council, which provided a wealth of valuable advice to expat business operators – as well as those considering conducting business here.

The first speaker, Douglas D Mancill, shed light on some of the restrictions and risks associated with Thailand’s Foreign Business Act (FBA). Enacted in 1999, the FBA divides businesses into three categories, he noted.

“The first category comprises businesses that a foreign company simply cannot operate. It is more difficult to obtain a Category Two business license, which requires approval from cabinet. A transport business is an example of a type of business in this category…

“The government is a little more lax in granting category three alien licenses, however,” he said.

Mr Mancill emphasized that the statutes and sanctions of the FBA, “have a lot of teeth”:

“Violations, if imposed in full, can mean up to three years in prison, a million baht fine and a dissolution of the [Thai incorporation of the] business… The Department of Business Development (DBD) has determined that at least 484 businesses have violated the FBA, and are starting to be pro-active and pursue prosecution,” he warned, adding that the Department of Special Investigations (DSI) – the Thai counterpart of the US Federal Bureau Investigations (FBI) – has become more active in monitoring and investigating foreign businesses.

A partner at Bangkok-based law firm, Price Sanond Prabhas & Wynne, Mr Mancill highlighted some of the ambiguities of the FBA, specifically with respect to violations that involve illegal “nominee shareholding”.

Mancill, an American citizen and Thailand expat of 14 years, said that: “The statute that covers this doesn’t use the word ‘nominee’…it refers to aiding and abetting foreigners in operating a business, which is subject to the FBA.”

Mr Mancill went on to explain that legislature in the Kingdom distinguishes between “control” of a company and the actual share ownership. He says the latter is more relevant in the eyes of Thai law.

“What the MoC (Ministry of Commerce) and DBD look at during a registration of a new business is whether the Thai party actually has the ability to purchase their shares. The second thing they look for, is whether the Thai party actually made the investment and paid for the share.They often require a bank statement going back six months for verification.”

Thus, he advised expat business owners, shareholders and/or their respective Thai partners to be especially careful when signing certain documents, which may implicate them in a violation of the FBA.

Moving on to the Treaty of Amity and Commerce, the long-running bilateral agreement between the USA and Thailand, which provides juristic entities [people doing business] from either country certain exception clauses in the other party’s jurisdiction for trade and business.

“I often get asked when this treaty is going to expire… In order for that [the treaty to expire] to happen, either one of the parties – Thailand or the US – would have to give one year’s notice of their intention to cancel the treaty. This has not happened, and thus the treaty is not due to expire.”

The next speaker, Michael Ramirez, a senior consultant for the Tilleke & Gibbins Dispute Resolution Group, shed some light on trends in anti-corruption laws:

“With corruption, most people tend to think about the public-to-private type, but actually a lot of the corruption cases involve the private-to-private sector.”

He pointed out that Thailand was not one of the signatories of the Organization for Economic Cooperation and Development (OECD) Anti-bribery convention in 1999, which had a total 38 signatories, most of which were Western countries.

However, the country was part of the ADB – OECD Anti-Corruption Initiative, 2010, which involved 28 Asia-Pacific nations, who made a commitment to “criminalize bribing of foreign officials” and “sanction businesses involved in bribery.”

Nonetheless, Michael said that there is gradual progress taking place in curbing corruption in Thailand in respect to the enactment and enforcement of laws.

“When you begin to accept that corruption is part of doing business, then you are in some ways facilitating that corruption,” he concluded.

Finally, Olaf Duensing, co-founder of the legal advisory and services firm Duensing Kippen Ltd, highlighted the importance of including an arbitration clause in business contracts.

Licensed to practice law in Germany and a member of the Chartered Institute of Arbitrators (MCIArb), he has worked as a legal consultant in Thailand for 11 years. Olaf said that it is important to include various details in this clause.

“In addition to the arbitrators, who must be independent and impartial, it is also important to identify the jurisdiction and language that the arbitration will be conducted [in],” he said.

“All parties must agree to the arbitration clause. It cannot be enforced if all parties did not sign to it. However, once signed, you can not back out,” he said.

One important point he made is that parties involved should review and consider any and all relevant laws in the respective jurisdiction, which might impact the award or enforcement of an arbitration decision.

For more information see: Duensing Kippen (; Tilleke & Gibbins International ( and Price Sanond Prabhas & Wynne (

— Steven Layne


Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram


Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Thailand2 mins ago

Thailand conservation adds 17 rare Indochinese tigers this year

Pattaya1 hour ago

Man falls off 4th story roof only breaking arm and chin

Thailand6 hours ago

Family finds long lost man after he is rescued from 17 metre well

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Coronavirus (Covid-19)7 hours ago

16 new dark red provinces and restrictions extended to Aug 16

Hua Hin9 hours ago

Hua Hin Maya Club execs get 3 months for superspreader event

Myanmar10 hours ago

Thai candidate selected as ASEAN envoy to Myanmar

Join the conversation on the Thaiger Talk forums today!
Coronavirus (Covid-19)11 hours ago

Foreigners able to register on vaccine site despite data leaks, glitches

Thailand11 hours ago

Covid UPDATE: 18,027 infections, provincial totals

Thailand20 hours ago

Covid UPDATE Sunday: 18,027 infections, expat vaccine registration

Transport1 day ago

August flight plans: Bangkok Airways, Nok Air, Thai Lion

Coronavirus (Covid-19)1 day ago

New site for foreigner vaccine; Mor Prom deletes appointments

Politics1 day ago

Facebook fake news post suggesting a coup faces prosecution

Koh Samui1 day ago

UPDATED: Samui Covid-19: 14 new Black Club infections, 2nd small cluster

Thailand1 day ago

40,000 cases a day could happen by September, says projection

Phuket1 day ago

Phuket Sandbox Covid-19 infections: 35 today, 209 this week

Thailand5 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism5 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket5 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism5 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand6 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand6 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand7 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand7 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand7 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand7 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand7 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand7 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand7 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8